MJIEL Vol 14 Issue 3 2017 - Article 1
Safeguarding India's Regulatory Autonomy:
Analysis of the New Model Bilateral Investment Treaty
Aniruddha Rajput
ABSTRACT: India is presently the fastest growing economy and also a prominent capital importer. Its treaty practice cannot be ignored. The Government of India recently announced a Model Bilateral Investment Treaty. The underlying characteristic of the Model BIT is conservation of regulatory autonomy. The Indian Model BIT aims at conserving regulatory autonomy by employing five methods. First, the preamble is so structured that an investment tribunal will have to give due regard to regulatory autonomy. Second, the possibility of review of regulatory actions is reduced by narrowing the scope of jurisdiction of arbitral tribunals. This is achieved by narrowing the definition of investment, investor and the scope of the Model BIT. For the first time an enterprise based definition has been introduced. Thirdly, the scope of treatment standards has been reduced. Standards such as fair and equitable treatment, most-favoured-nation and umbrella clause have been removed and the scope of customary standard, full protection and security, indirect expropriation and national treatment have been reduced. Fourthly, exceptions applicable generally and in specific circumstances have been introduced. Lastly, the access to arbitration has been limited through the need of exhaustion of local remedies.

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